Baron Capital, an investment management company, released its Q4 2025 letter for its “Baron Real Estate Fund”. A copy of the letter is available to download here. Baron Real Estate Fund was recognized as the Best Real Estate Fund Over Three Years at the 2026 LSEG Lipper Funds Awards, reflecting the three-year performance ending December 31, 2025. The Fund declined 5.39% (Institutional Shares) in Q1, underperforming the MSCI USA IMI Extended Real Estate Index (−0.96%) and the MSCI US REIT Index (+4.52%). Despite the Q1 decline, the long-term performance remains strong. The letter covers current thoughts, portfolio composition, key themes, top contributors and detractors, recent activity, and outlook for real estate and the Fund. The Fund has a positive outlook on the broader equity market and public real estate, and maintains a constructive outlook with compelling reasons to stay the course. Please review the Fund’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Baron Real Estate Fund highlighted stocks like Red Rock Resorts, Inc. (NASDAQ:RRR). Headquartered in Las Vegas, Nevada, Red Rock Resorts, Inc. (NASDAQ:RRR) develops and operates casino and entertainment properties. On June 12, 2026, Red Rock Resorts, Inc. (NASDAQ:RRR) closed at $62.85 per share. One-month return of Red Rock Resorts, Inc. (NASDAQ:RRR) was 20.59%, and its shares gained 25.88% over the past 52 weeks. Red Rock Resorts, Inc. (NASDAQ:RRR) has a market capitalization of $6.59 billion.
Baron Real Estate Fund stated the following regarding Red Rock Resorts, Inc. (NASDAQ:RRR) in its Q1 2026 investor letter:
“We believe several travel-related real estate companies are well positioned to benefit from a favorable “trifecta” of cyclical, secular, and 2026-specific tailwinds, which should support strong fundamentals and share price performance in the years ahead.
Red Rock Resorts, Inc. (NASDAQ:RRR) is one of the several travel-related companies that are attractively valued. It is a leading gaming growth company positioned in the highly attractive Las Vegas Locals market. Red Rock Resorts has the real estate capacity to potentially double its portfolio in the coming years, and we find its current valuation – under 10 times 2027 estimated cash flow – extremely compelling.”
Red Rock Resorts, Inc. (NASDAQ:RRR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 30 hedge fund portfolios held Red Rock Resorts, Inc. (NASDAQ:RRR) at the end of the first quarter, compared to 35 in the previous quarter. While we acknowledge the risk and potential of Red Rock Resorts, Inc. (NASDAQ:RRR) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RED ROCK RESORTS, INC. (NASDAQ:RRR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Red Rock Resorts, Inc. (NASDAQ:RRR) and shared Diamond Hill Small Cap Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
